Innovation of Note
New York adds a Continuing Legal Education requirement, effective January 1, 2023, on Cyber-Security, Privacy, and Data Protection, in line with ABA policies on technology competency requirements.
On May 24, 2022 an Opinion and Order was issued in the Upsolve v. New York Case (22-CV-00627 (PAC)) grants the Plaintiff’s motion for preliminary injunction, effectively preventing the Attorney General from prosecuting the Plaintiffs under the unauthorized practice of law. This Order directly relates to Rule 5.5.
In a new decision by the New York State Bar Association Commission on Professional Ethics (Opinion 1234 on December 7, 2021), New York attorneys, on a case-by-case basis, are allowed to co-counsel with firms that have nonlawyer ownership. Those firms with nonlawyer ownership must be licensed in their jurisdiction for a New York attorney to comply with Rule 5.4. The opinion specifies that the attorney may not have an employment relationship with the alternative business structure.
New York allows for Court Navigators. In June 2020, it announced creation of task force to study technology and other innovations.
The New York Commission to Reimagine the Future of NY Courts’ Working Group on Regulatory Innovation issued its report in December 2020. The three main recommendations are:
- The provision of certain “legal” services and advocacy by trained and certified social workers should be permitted;
- The Court Navigators program should be expanded both in scope and substance; and
- Alternate Business Structures (“ABS”) for law firms should not be permitted in New York at the present time, but current experiments under way in Arizona, Utah, and California should be followed carefully and, if they are successful, the creation of an ABS model or models in New York State with the use of a “sandbox” should be reconsidered.
Change Log Entries
Differences from ABA Model Rules
| Rule 1.2(c) Limited Scope | Significant Changes |
| Rule 5.4(a) Fee-Sharing | Significant Changes |
| Rules 5.4(b)-(d) Non-Lawyer Ownership | Significant Changes |
| Rule 5.5. Unauthorized Practice of Law | Significant Changes |
| Rule 5.7 Law Related Services | Significant Changes |
| Rule 6.5 Limited Scope | Significant Changes |
| Rule 7.2(b) Lawyer Referral | Significant Changes |
| Cloud Computing Advisory | Yes |
| Technology Competency Rules | Yes |
ABA Rule 1.2(c) (Limited Scope)
RULE 1.2:SCOPE OF REPRESENTATION AND ALLOCATION OF AUTHORITY BETWEEN CLIENT AND LAWYER
…
(c)
A lawyer may limit the scope of the representation if the limitation is
reasonable under the circumstances, the client gives informed consent and where necessary
notice is provided to the tribunal and/or opposing counsel.
Modified By:
New York County Law Association Committee on Professional Ethics Op. 742 (2010) (It is ethically permissible for an attorney to prepare pleadings and other submissions for pro se litigants. Lawyers are not required to disclose such assistance, except in certain, limited situations.)
Ass’n of the Bar of the City of New York Formal Op. 2009-2 (2009) (Ethics rules permit an attorney to make certain statements to a self-represented individual who is adverse to their own client. The attorney may identify general legal issues that a self-represented person should address and may also discuss undisputed statements or facts of law. In addition, an attorney may advise a self-represented individual to seek counsel and may also refer a self-represented litigant to seek assistance from a court-sponsored self-help program. The attorney may also clarify his or her role, and must volunteer such information if the self-represented person misunderstands the attorney’s role in the matter.)
New York State Bar Ass’n Op. 613 (1990) (A lawyer who does not appear as counsel of record for a pro se litigant may prepare responsive pleadings and demands for financial disclosure, provided the lawyer investigates the matter adequately.)
N.Y. City Ethics Op. 2001-3 (2001) (lawyer may limit scope of representation to avoid conflict with current or former client, provided client whose representation is limited consents after full disclosure and limitation does not so restrict representation as to render it inadequate)
AmBase Corp. v. Davis Polk & Wardwell, 866 N.E.2d 1033 (N.Y. 2007) (law firm hired to litigate company’s tax dispute could not be sued for failing to advise client that parent company might bear primary tax liability)
In re Liu, 664 F.3d 367 (2d Cir. 2011) (lawyer’s helping pro se litigants draft petitions without disclosing assistance to court was not sanctionable misconduct)
Greenwich v. Markhoff, 650 N.Y.S.2d 704 (App. Div. 1996) (law firm may be liable for malpractice for failure to file personal injury action on behalf of client even though retainer agreement purported to limit scope of representation to workers’ compensation claim; retainer agreement did not obviate firm’s duty to apprise client that personal injury action might lie)
Relevant Comments:
[6]The scope of services to be provided by a lawyer may be limited by agreement with the client or by the terms under which the lawyer’s services are made available to the client. When a lawyer has been retained by an insurer to represent an insured, for example, the representation may be limited to issues related to the insurance coverage. A limited representation may be appropriate because the client has limited objectives for the representation. In addition, the terms upon which representation is undertaken may exclude specific means that might otherwise be used to accomplish the client’s objectives. Such limitations may exclude actions that the client thinks are too costly or that the lawyer regards as repugnant or imprudent.
[6A]In obtaining consent from the client, the lawyer must adequately disclose the limitations on the scope of the engagement and the matters that will be excluded. In addition, the lawyer must disclose the reasonably foreseeable consequences of the limitation. In making such disclosure, the lawyer should explain that if the lawyer or the client determines during the representation that additional services outside the limited scope specified in the engagement are necessary or advisable to represent the client adequately, then the client may need to retain separate counsel, which could result in delay, additional expense, and complications.
[7]Although this Rule affords the lawyer and client substantial latitude to limit the representation, the limitation must be reasonable under the circumstances. If, for example, a client’s objective is limited to securing general information about the law the client needs in order to handle a common and typically uncomplicated legal problem, the lawyer and client may agree that the lawyer’s services will be limited to a brief telephone consultation. Such a limitation, however, would not be reasonable if the time allotted were not sufficient to yield advice upon which the client could rely. Although an agreement for a limited representation does not exempt a lawyer from the duty to provide competent representation, the limitation is a factor to be considered when determining the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. See Rule 1.1.
[8]All agreements concerning a lawyer’s representation of a client must accord with the Rules of Professional Conduct and other law. See Rules 1.1, 1.8 and 5.6.
ABA Rule 5.4(a) (Fee-sharing)
RULE 5.4: PROFESSIONAL INDEPENDENCE OF A LAWYER
(a)A lawyer or law firm shall not share legal fees with a nonlawyer, except that:
- an agreement by a lawyer with the lawyer’s firm or another lawyer
associated in the firm may provide for the payment of money, over a reasonable
period of time after the lawyer’s death, to the lawyer’s estate or to one or more
specified persons;
(2) a lawyer who undertakes to complete unfinished legal business of a
deceased lawyer may pay to the estate of the deceased lawyer that portion of the
total compensation that fairly represents the services rendered by the deceased
lawyer; and
(3) a lawyer or law firm may compensate a nonlawyer employee or
include a nonlawyer employee in a retirement plan based in whole or in part on a
profit-sharing arrangement.
Relevant Comments:
[1]The provisions of this Rule express traditional limitations on sharing fees. These limitations are to protect the lawyer’s professional independence of judgment. Where someone other than the client pays the lawyer’s fee or salary, or recommends employment of the lawyer, that arrangement does not modify the lawyer’s obligation to the client. As stated in paragraph (c), such arrangements should not interfere with the lawyer’s professional judgment.
[1A]Paragraph (a)(2) governs the compensation of a lawyer who undertakes to complete one or more unfinished pieces of legal business of a deceased lawyer. Rule 1.17 governs the sale of an entire law practice upon retirement, which is defined as the cessation of the private practice of law in a given geographic area.
[1B]Paragraph (a)(3) permits limited fee sharing with a nonlawyer employee, where the employee’s compensation or retirement plan is based in whole or in part on a profit-sharing arrangement. Such sharing of profits with a nonlawyer employee must be based on the total profitability of the law firm or a department within a law firm and may not be based on the fee resulting from a single case.
Modified By:
N.Y. State Ethics Op. 1234 (2021) (A New York lawyer, with a New York law firm, living abroad, is allowed to co-counsel with an English firm that has an alternative business structure and nonlawyer ownership)
N.Y. State Ethics Op. 819 (2007) (divorce lawyer who has been awarded fees to be paid by opponent may agree to accept smaller amount from client, and then remit to client whatever portion thereof he eventually recovers from opponent)
N.Y. State Ethics Op. 727 (2000) (lawyer may not accept referral of personal injury case from accounting firm in return for agreement to share contingent fee)
N.Y. State Ethics Op. 733 (2000) (nonlawyer employee may receive compensation based upon profit-sharing arrangement with law firm, but may not be paid percentage of profits or fees attributable to particular matters he refers)
ABA Rule 5.4(b – d) Non-lawyer ownership
RULE 5.4: PROFESSIONAL INDEPENDENCE OF A LAWYER
…
(d) A lawyer shall not practice with or in the form of an entity authorized to
practice law for profit, if:
- a nonlawyer owns any interest therein, except that a fiduciary
representative of the estate of a lawyer may hold the stock or interest of the lawyer
for a reasonable time during administration;
(2) a nonlawyer is a member, corporate director or officer thereof or
occupies a position of similar responsibility in any form of association other than a
corporation; or
(3)a nonlawyer has the right to direct or control the professional
judgment of a lawyer.
Relevant Comments:
[2]This Rule also expresses traditional limitations on permitting a third party to direct or regulate the lawyer’s professional judgment in rendering legal services to another. See alsoRule 1.8(f), providing that a lawyer may accept compensation from a third party as long as there is no interference with the lawyer’s professional judgment and the client gives informed consent.
Modified By:
N.Y. State Ethics Op. 911 (2012) (New York lawyers may not get around fee-sharing prohibition by establishing New York outpost of firm organized in United Kingdom, where alternative business structures permitted); ABA
New York State Ethics Op. 861 (2011) (“attorney” refers to “person licensed to practice law in a U.S. jurisdiction or in a jurisdiction determined upon inquiry to provide persons admitted or licensed to practice law with education, training and ethical standards comparable to those of American lawyers”).
N.Y. State Ethics Op. 801 (2006) (lawyer may not form partnership with lawyer not admitted in New York if other lawyer would be engaged in unauthorized practice of law in New York); ABA
N.Y. State Ethics Op. 889 (2011) (New York lawyer also admitted in D.C. and principally practicing there would be governed by D.C.’s more liberal Rule 5.4); ABA
ABA Rule 5.5 (UPL)
RULE 5.5: UNAUTHORIZED PRACTICE OF LAW
- A lawyer shall not practice law in a jurisdiction in violation of the regulation
of the legal profession in that jurisdiction.
(b)A lawyer shall not aid a nonlawyer in the unauthorized practice of law.
Relevant Comments:
[1]A lawyer may practice law only in a jurisdiction in which the lawyer is authorized to practice. A lawyer may be admitted to practice law in a jurisdiction on a regular basis or may be authorized by court rule or order or by law to practice for a limited purpose or on a restricted basis. Paragraph (a) applies to unauthorized practice of law in another jurisdiction by a lawyer through the lawyer’s direct action, and paragraph (b) prohibits a lawyer from aiding a nonlawyer in the unauthorized practice of law.
[2]The definition of the “practice of law” is established by law and varies from one jurisdiction to another. Whatever the definition, limiting the practice of law to members of the bar protects the public against rendition of legal services by unqualified persons. This Rule does not prohibit a lawyer from employing the services of paraprofessionals and delegating functions to them, so long as the lawyer supervises the delegated work and retains responsibility for their work. See Rule 5.3.
Modified By:
N.Y. City Ethics Op. 2006-3 (2006) (lawyer outsourcing support services to nonlawyer located overseas must rigorously supervise work to avoid aiding in unauthorized practice)
Bernard O. Feldman DDS PC v. Mazzei, 631 N.Y.S.2d 241 (N.Y. Dist. Ct. 1995)
Bd. of Educ. v. New York State Pub. Employment Relations Bd., 649 N.Y.S.2d 523 (N.Y. App. Div. 1996) (permitting collective bargaining representative to be represented at administrative hearing by nonlawyer labor relations specialist)
Estate of Friedman, 482 N.Y.S.2d 686 (N.Y. Surr. Ct. 1984) (individual could not use power of attorney as device to license nonlawyer to represent her in judicial proceeding)
Gross v. Reliance Ins. Co., 462 N.Y.S.2d 776 (N.Y. Sup. Ct. 1983) (negotiating and adjusting insurance claims constitute practice of law and, with certain statutory exceptions, should be undertaken only by licensed attorneys)
In re LaMattina, 858 N.Y.S.2d 222 (App. Div. 2008) (lawyer allowed his name to be used to form corporation run by nonlawyers who in turn represented lenders at real estate closings without his supervision)
In re Rowe, 604 N.E.2d 728 (N.Y. 1992) (publishing article on legal topic and identifying himself in it as “J.D.” did not violate suspension directing lawyer not to practice law, give advice on law, or hold himself out as lawyer)
New York County Lawyers’ Ass’n v. Dacey, 234 N.E.2d 459 (N.Y. 1967) (publication and sale of book How to Avoid Probate did not constitute practice of law since book was directed to general public and not to individuals)
People v. Peska, 393 N.Y.S.2d 650 (N.Y. Sup. Ct. 1977)
Sutton v. Hafner Valuation Grp., Inc., 115 A.D.3d 1039 (N.Y. Sup. Ct. 2014) (certified real estate appraiser did not hold himself out as licensed lawyer by listing “Juris Doctor” on his résumé; fraud count against him properly dismissed)
ABA Rule 5.7 (Law Related Services)
RULE 5.7:
RESPONSIBILITIES REGARDING NONLEGAL SERVICES
(a) With respect to lawyers or law firms providing nonlegal services to clients or
other persons:
(1)A lawyer or law firm that provides nonlegal services to a person that
are not distinct from legal services being provided to that person by the lawyer or
law firm is subject to these Rules with respect to the provision of both legal and
nonlegal services.
(2)A lawyer or law firm that provides nonlegal services to a person that are distinct from legal services being provided to that person by the lawyer or law firm is subject to these Rules with respect to the nonlegal services if the person receiving the services could reasonably believe that the nonlegal services are the subject of a client-lawyer relationship.
(3)A lawyer or law firm that is an owner, controlling party or agent of, or that is otherwise affiliated with, an entity that the lawyer or law firm knows to be providing nonlegal services to a person is subject to these Rules with respect to the nonlegal services if the person receiving the services could reasonably believe that the nonlegal services are the subject of a client-lawyer relationship.
(4)For purposes of paragraphs (a)(2) and (a)(3), it will be presumed that
the person receiving nonlegal services believes the services to be the subject of a
client-lawyer relationship unless the lawyer or law firm has advised the person
receiving the services in writing that the services are not legal services and that the
protection of a client-lawyer relationship does not exist with respect to the nonlegal
services, or if the interest of the lawyer or law firm in the entity providing nonlegal
services is de minimis.
(b)Notwithstanding the provisions of paragraph (a), a lawyer or law firm that is
an owner, controlling party, agent, or is otherwise affiliated with an entity that the lawyer
or law firm knows is providing nonlegal services to a person shall not permit any
nonlawyer providing such services or affiliated with that entity to direct or regulate the
professional judgment of the lawyer or law firm in rendering legal services to any person,
or to cause the lawyer or law firm to compromise its duty under Rule 1.6(a) and Rule 1.6(c)
with respect to the confidential information of a client receiving legal services.
(c) For purposes of this Rule, “nonlegal services” shall mean those services that
lawyers may lawfully provide and that are not prohibited as an unauthorized practice of
law when provided by a nonlawyer.
Relevant Comments:
[1]For many years, lawyers have provided nonlegal services to their clients. By participating in the delivery of these services, lawyers can serve a broad range of economic and other interests of clients. Whenever a lawyer directly provides nonlegal services, the lawyer must avoid confusion on the part of the client as to the nature of the lawyer’s role, so that the person for whom the nonlegal services are performed understands that the services may not carry with them the legal and ethical protections that ordinarily accompany a client-lawyer relationship. The recipient of the nonlegal services may expect, for example, that the protection of client confidences and secrets, prohibitions against representation of persons with conflicting interests, and obligations of a lawyer to maintain professional independence apply to the provision of nonlegal services when that may not be the case. The risk of confusion is especially acute when the lawyer renders both legal and nonlegal services with respect to the same matter. Under some circumstances, the legal and nonlegal services may be so closely entwined that they cannot be distinguished from each other. In this situation, the recipient is likely to be confused as to whether and when the relationship is protected as a client-lawyer relationship. Therefore, where the legal and nonlegal services are not distinct, paragraph (a)(1) requires that the lawyer providing nonlegal services adhere to all of the requirements of these Rules with respect to the nonlegal services. Paragraph (a)(1) applies to the provision of nonlegal services by a law firm if the person for whom the nonlegal services are being performed is also receiving legal services from the firm that are not distinct from the nonlegal services.
[2]Even when the lawyer believes that the provision of nonlegal services is distinct from any legal services being provided, there is still a risk that the recipient of the nonlegal services might reasonably believe that the recipient is receiving the protection of a client-lawyer relationship. Therefore, paragraph (a)(2) requires that the lawyer providing the nonlegal services adhere to these Rules, unless the person understands that the nonlegal services are not the subject of a client-lawyer relationship. Nonlegal services also may be provided through an entity with which a lawyer is affiliated, for example, as owner, controlling party or agent. In this situation, there is still a risk that the recipient of the nonlegal services might reasonably believe that the recipient is receiving the protection of a client-lawyer relationship. Therefore, paragraph (a)(3) requires that the lawyer involved with the entity providing nonlegal services adhere to all of these Rules with respect to the nonlegal services, unless the person understands that the nonlegal services are not the subject of a client-lawyer relationship.
[3]These Rules will be presumed to apply to a lawyer who directly provides or is otherwise involved in the provision of nonlegal services unless the lawyer complies with paragraph (a)(4) by communicating in writing to the person receiving the nonlegal services that the services are not legal services and that the protection of a client-lawyer relationship does not exist with respect to the nonlegal services. Such a communication should be made before entering into an agreement for the provision of nonlegal services in a manner sufficient to ensure that the person understands the significance of the communication. In certain circumstances, however, additional steps may be required to ensure that the person understands the distinction. For example, while the written disclaimer set forth in paragraph (a)(4) will be adequate for a sophisticated user of legal and nonlegal services, a more detailed explanation may be required for someone unaccustomed to making distinctions between legal services and nonlegal services. Where appropriate and especially where legal services are provided in the same transaction as nonlegal services, the lawyer should counsel the client about the possible effect of the proposed provision of services on the availability of the attorney-client privilege. The lawyer or law firm will not be required to comply with these requirements if its interest in the entity providing the nonlegal services is so small as to be de minimis.
[4]Although a lawyer may be exempt from the application of these Rules with respect to nonlegal services on the face of paragraph (a), the scope of the exemption is not absolute. A lawyer who provides or who is involved in the provision of nonlegal services may be excused from compliance with only those Rules that are dependent upon the existence of a representation or client-lawyer relationship. Other Rules, such as those prohibiting lawyers from misusing the confidences or secrets of a former client (see Rule 1.9), requiring lawyers to report certain lawyer misconduct (see Rule 8.3), and prohibiting lawyers from engaging in illegal, dishonest, fraudulent or deceptive conduct (see Rule 8.4), apply to a lawyer irrespective of the existence of a representation, and thus govern a lawyer not covered by paragraph (a). A lawyer or law firm rendering legal services is always subject to these Rules.Provision of Legal and Nonlegal Services in the Same Transaction
[5]In some situations it may be beneficial to a client to purchase both legal and nonlegal services from a lawyer, law firm or affiliated entity in the same matter or in two or more substantially related matters. Examples include: (i) a law firm that represents corporations and also provides public lobbying, public relations, investment banking and business relocation services, (ii) a law firm that represents clients in environmental matters and also provides engineering consulting services to those clients, and (iii) a law firm that represents clients in litigation and also provides consulting services relating to electronic document discovery. In these situations, the lawyer may have a financial interest in the nonlegal services that would constitute a conflict of interest under Rule 1.7(a)(2), which governs conflicts between a client and a lawyer’s personal interests.
[5A]Under Rule 1.7(a)(2), a concurrent conflict of interest exists when a reasonable lawyer would conclude that there is a significant risk that the lawyer’s professional judgment on behalf of a client will be adversely affected by the lawyer’s own financial, business, property or personal interests. When a lawyer or law firm provides both legal and nonlegal services in the same matter (or in substantially related matters), a conflict with the lawyer’s own interests will nearly always arise. For example, if the legal representation involves exercising judgment about whether to recommend nonlegal services and which provider to recommend, or if it involves overseeing the provision of the nonlegal services, then a conflict with the lawyer’s own interests under Rule 1.7(a)(2) is likely to arise. However, when seeking the consent of a client to such a conflict, the lawyer should comply with both Rule 1.7(b) regarding the conflict affecting the legal representation of the client and Rule 1.8(a) regarding the business transaction with the client.
[5B]Thus, the client may consent if: (i) the lawyer complies with Rule 1.8(a) with respect to the transaction in which the lawyer agrees to provide the nonlegal services, including obtaining the client’s informed consent in a writing signed by the client, (ii) the lawyer reasonably believes that the lawyer can provide competent and diligent legal representation despite the conflict within the meaning of Rule 1.7(b), and (iii) the client gives informed consent pursuant to Rule 1.7(b), confirmed in writing. In certain cases, it will not be possible to provide both legal and nonlegal services because the lawyer could not reasonably believe that he or she can represent the client competently and diligently while providing both legal and nonlegal services in the same or substantially related matters. Whether providing dual services gives rise to an impermissible conflict must be determined on a case-by-case basis, taking into account all of the facts and circumstances, including factors such as: (i) the experience and sophistication of the client in obtaining legal and nonlegal services of the kind being provided in the matter, (ii) the relative size of the anticipated fees for the legal and nonlegal services, (iii) the closeness of the relationship between the legal and nonlegal services, and (iv) the degree of discretion the lawyer has in providing the legal and nonlegal services.
[6]In the context of providing legal and nonlegal services in the same transaction, Rule 1.8(a) first requires that: (i) the nonlegal services be provided on terms that are fair and reasonable to the client, (ii) full disclosure of the terms on which the nonlegal services will be provided be made in writing to the client in a manner understandable by the client, (iii) the client is advised to seek the advice of independent counsel about the provision of the nonlegal services by the lawyer, and (iv) the client gives informed consent, as set forth in Rule 1.8(a)(3), in a writing signed by the client, to the terms of the transaction in which the nonlegal services are provided and to the lawyer’s inherent conflict of interest.
[7]In addition, in the context of providing legal and nonlegal services in the same transaction, Rule 1.8(a) requires a full disclosure of the nature and extent of the lawyer’s financial interest or stake in the provision of the nonlegal services. By its terms, Rule 1.8(a) requires that the nonlegal services be provided on terms that are fair and reasonable to the client. (Where the nonlegal services are provided on terms generally available to the public in the marketplace, that requirement is ordinarily met.) Consequently, as a further safeguard against conflicts that may arise when the same lawyer provides both legal and nonlegal services in the same or substantially related matters, a lawyer may do so only if the lawyer not only complies with Rule 1.8(a) with respect to the nonlegal services, but also obtains the client’s informed consent, pursuant to Rule 1.7(b), confirmed in writing, after fully disclosing the advantages and risks of obtaining legal and nonlegal services from the same or affiliated providers in a single matter (or in substantially related matters), including the lawyer’s conflict of interest arising from the lawyer’s financial interest in the provision of the nonlegal services.
Modified By:
N.Y. State Ethics Op. 938 (2012) (law firm owning business that provides nonlegal Social Security Disability Insurance claims services and employs only nonlawyers may pay for “leads” from marketing organization if business is run separately from firm and disclaims provision of legal services).
N.Y. State Ethics Op. 951 (2012) (identifying self as lawyer when providing services that are “arguably legal in nature” would render ineffective written statements disclaiming lawyer-client relationship)
N.Y. State Ethics Op. 951 (2012) (statements disclaiming lawyer-client relationship ineffective if services rendered are actually legal services).
N.Y. State Ethics Op. 824 (2008) (monitoring clients’ investment portfolios to identify potential securities fraud claims is “legal service”)
N.Y. State Ethics Op. 832 (2009) (Rule 8.4(c) prohibits deceptive advertising or solicitation of nonlegal services)
ABA Rule 6.5 (Court annexed/Non-profit limited scope)
RULE 6.5: PARTICIPATION IN LIMITED PRO BONO LEGAL SERVICES PROGRAMS
(a)A lawyer who, under the auspices of a program sponsored by a court,
government agency, bar association or not-for-profit legal services organization, provides
short-term limited legal services to a client without expectation by either the lawyer or the
client that the lawyer will provide continuing representation in the matter:
(1)shall comply with Rules 1.7, 1.8 and 1.9, concerning restrictions on
representations where there are or may be conflicts of interest as that term is
defined in these Rules, only if the lawyer has actual knowledge at the time of
commencement of representation that the representation of the client involves a
conflict of interest; and
(2)shall comply with Rule 1.10 only if the lawyer has actual knowledge at
the time of commencement of representation that another lawyer associated with the lawyer in a law firm is affected by Rules 1.7, 1.8 and 1.9.
(b)Except as provided in paragraph (a)(2), Rule 1.7 and Rule 1.9 are inapplicable to a representation governed by this Rule.
(c)Short-term limited legal services are services providing legal advice or
representation free of charge as part of a program described in paragraph (a) with no
expectation that the assistance will continue beyond what is necessary to complete an initial
consultation, representation or court appearance.
(d)The lawyer providing short-term limited legal services must secure the
client’s informed consent to the limited scope of the representation, and such
representation shall be subject to the provisions of Rule 1.6.
(e)This Rule shall not apply where the court before which the matter is pending
determines that a conflict of interest exists or, if during the course of the representation,
the lawyer providing the services becomes aware of the existence of a conflict of interest
precluding continued representation.
Relevant Comments:
[1]Legal services organizations, courts, government agencies, bar associations and various non-profit organizations have established programs through which lawyers provide free short-term limited legal services, such as advice or the completion of legal forms, to assist persons to address their legal problems without further representation by a lawyer. In these programs, such as legal-advice hotlines, advice-only clinics or pro se counseling programs, a client-lawyer relationship is established, but there is no expectation that the lawyer’s representation of the client will continue beyond the limited consultation. Such programs are normally operated under circumstances in which it is not feasible for a lawyer to utilize the conflict-checking system required by Rule 1.10(e) before providing the short-term limited legal services contemplated by this Rule. See also Rules 1.7, 1.8, 1.9, 1.10.
[2]A lawyer who provides short-term limited legal services pursuant to this Rule must secure the client’s informed consent to the limited scope of the representation. See Rule 1.2(c). If a short-term limited representation would not be reasonable under the circumstances, the lawyer may offer advice to the client, but must also advise the client of the need for further assistance of counsel. Except as provided in this Rule, these Rules, including Rules 1.6 and Rule 1.9(c), are applicable to the limited representation.
[3]Because a lawyer who is representing a client in the circumstances addressed by this Rule ordinarily is not able to check systematically for conflicts of interest, paragraph (a) requires compliance with Rules 1.7, 1.8 and 1.9 only if the lawyer knows that the representation presents a conflict of interest for the lawyer, and with Rule 1.10 only if the lawyer knows that another lawyer in the lawyer’s firm is affected by these Rules.
[4]Because the limited nature of the services significantly reduces the risk of conflicts of interest with other matters being handled by the lawyer’s firm, paragraph (b) provides that Rules 1.7 and 1.9 are inapplicable to a representation governed by this Rule, except as provided by paragraph (a)(2). Paragraph (a)(2) requires the participating lawyer to comply with Rule 1.10 only when the lawyer knows that the lawyer’s firm is affected by Rules 1.7, 1.8 or 1.9.
[5]If, after commencing a short-term limited representation in accordance with this Rule, a lawyer undertakes to represent the client in the matter on an ongoing basis, Rules 1.7, 1.9(a) and 1.10 become applicable.
Modified By:
New York City Ethics Op. 2009-03 (2009) (state’s version of Rule 6.5 “apparently not adopted with the clinical training activities of law students in mind”; no easing of conflicts consequences unless clinical assignment separately meets criteria for short-term limited legal services ABA
N.Y. State Ethics Op. 1012 (2014) (in bar association pro bono program that requires clients to agree in writing that lawyers’ services do not extend beyond the one interaction, conflicts resulting from lawyer’s participation are not imputed to his firm members);
ABA Rule 7.2 (Lawyer referral)
RULE 7.2: PAYMENT FOR REFERRALS
(a)
A lawyer shall not compensate or give anything of value to a person or
organization to recommend or obtain employment by a client, or as a reward for having
made a recommendation resulting in employment by a client, except that:
(1)a lawyer or law firm may refer clients to a nonlegal professional or
Nonlegal professional service firm pursuant to a contractual relationship with such nonlegal professional or nonlegal professional service firm to provide legal andother professional services on a systematic and continuing basis as permitted by Rule 5.8, provided
however that such referral shall not otherwise include any monetary or other tangible consideration or reward for such, or the sharing of legal fees; and
(2)a lawyer may pay the usual and reasonable fees or dues charged by a
qualified legal assistance organization or referral fees to another lawyer as
permitted by Rule 1.5(g).
(b) A lawyer or the lawyer’s partner or associate or any other affiliated lawyer
may be recommended, employed or paid by, or may cooperate with one of the following
offices or organizations that promote the use of the lawyer’s services or those of a partner
or associate or any other affiliated lawyer, or request one of the following offices or
organizations to recommend or promote the use of the lawyer’s services or those of the
lawyer’s partner or associate, or any other affiliated lawyer as a private practitioner, if
there is no interference with the exercise of independent professional judgment on behalf of
the client:
(1)a legal aid office or public defender office:
(i)operated or sponsored by a duly accredited law school;
(ii)operated or sponsored by a bona fide, non-profit community organization;
(iii) operated or sponsored by a governmental agency; or
(iv) operated, sponsored, or approved by a bar association;
(2) a military legal assistance office;
(3) a lawyer referral service operated, sponsored or approved by a bar
association or authorized by law or court rule; or
(4) any bona fide organization that recommends, furnishes or pays for
legal services to its members or beneficiaries provided the following conditions are
satisfied:
(i) Neither the lawyer, nor the lawyer’s partner, nor associate, nor any other affiliated lawyer nor any nonlawyer, shall have initiated or promoted such organization for the primary purpose of providing financial or other benefit to such lawyer, partner, associate or affiliated lawyer;
(ii) Such organization is not operated for the purpose of procuring legal work or financial benefit for any lawyer as a private practitioner outside of the legal services program of the organization;
(iii) The member or beneficiary to whom the legal services are furnished, and not such organization, is recognized as the client of the lawyer in the matter;
(iv) The legal service plan of such organization provides appropriate relief for any member or beneficiary who asserts a claim that representation by counsel furnished, selected or approved by the organization for the particular matter involved would be unethical, improper
or inadequate under the circumstances of the matter involved; and the plan provides an appropriate procedure for seeking such relief;
(v) The lawyer does not know or have cause to know that such organization is in violation of applicable laws, rules of court or other legal requirements that govern its legal service operations; and
(vi)Such organization has filed with the appropriate disciplinary authority, to the extent required by such authority, at least annually a report with respect to its legal service plan, if any,
showing its terms, its schedule of benefits, its subscription charges, agreements with counsel and financial results of its legal service activities or, if it has failed to do so, the lawyer does not know or have cause to know of such failure.
Relevant Comments:
[1] Except as permitted under paragraphs (a)(1)-(a)(2) of this Rule or under Rule 1.17, lawyers are not permitted to pay others for recommending the lawyer’s services or for channeling professional work in a manner that would violate Rule 7.3 if engaged in by a lawyer. See Rule 8.4(a) (lawyer may not violate or attempt to violate a Rule, knowingly assist another to do so, or do so through the acts of another). A communication contains a recommendation of it endorses or vouches for a lawyer’s credentials, abilities, competence, character, or other professional qualities. Paragraph (a), however, does not prohibit a lawyer from paying for advertising and communications permitted by these Rules, including the costs of print directory listings, online directory listings, newspaper ads, television and radio airtime, domain name registrations, sponsorship fees, Internet-based advertisements, search engine optimization, and group advertising. A lawyer may also compensate employees, agents and vendors who are engaged to provide marketing or client development services, such as publicists, public-relations personnel, marketing personnel, business development staff, and web site designers. Moreover, a lawyer may pay others for generating clients leads, such as Internet-based client leads, as long as (i) the lead generator does not recommend the lawyers, (ii) any payment to the lead generator is consistent with Rules 1.5(g) (division of fees) and 5.4 (professional independence of the lawyer), (iii) the lawyer complies with Rule 1.8(f) (prohibiting interference with a lawyer’s indepdendent professional judgment by a person who recommends the lawyer’s services), and (iv) the lead generator’s communications are consistent with Rules 7.1 (Advertising) and 7.3 (Solicitation and Recommendation of Professional Employment). To comply with Rule 7.1, a lawyer must not pay a lead generator that states, implies, or creates a reasonable impression that it is recommending the lawyer, id making the referral without payment from the lawyer, or has analyzed a person’s legal problems when determining which lawyer should receive the referral. See also Rule 5.3 (Lawyer’s Responsibility for Conduct of Nonlawyers).
[2]A lawyer may pay the usual charges of a qualified legal assistance organization. A lawyer so participating should make certain that the relationship with a qualified legal assistance organization in no way interferes with independent professional representation of the interests of the individual client. A lawyer should avoid situations in which officials of the organization who are not lawyers attempt to direct lawyers concerning the manner in which legal services are performed for individual members and should also avoid situations in which considerations of economy are given undue weight in determining the lawyers employed by an organization or the legal services to be performed for the member or beneficiary, rather than competence and quality of service.
[3]A lawyer who accepts assignments or referrals from a qualified legal assistance organization must act reasonably to ensure that the activities of the plan or service are compatible with the lawyer’s professional obligations. See Rule 5.3. The lawyer must ensure that the organization’s communications with potential clients are in conformity with these Rules. Thus, advertising must not be false or misleading, as would be the case if the organization’s communications falsely suggested that it was a lawyer referral service sponsored by a state agency or bar association. Nor could the lawyer allow in-person, telephonic or real-time interactive electronic contacts that would violate this Rule.
[4] A lawyer also may agree to refer clients to another lawyer or a nonlawyer in return for the undertaking of that person to refer clients or customers to the lawyer. Such reciprocal referral arrangements must not interfere with the lawyer’s professional judgment as to making referrals or as to providing substantive legal services. See Rules 2.1, 5.4(c). Except as provided in Rule 1.5(e), a lawyer who receives referrals from a lawyer or nonlawyer must not pay anything solely for the referral, but the lawyer does not violate paragraph (a) by agreeing to refer clients to the other lawyer or nonlawyer so long as the reciprocal referral agreement is not exclusive and the client is informed of the referral agreement. A lawyer may enter into such an arrangement only if it is nonexclusive on both sides, so that both the lawyer and the nonlawyer are free to refer clients to others if that is in the best interest of those clients. Conflicts of interest created by such arrangements are governed by Rule 1.7. A lawyer’s interest in receiving a steady stream of referrals from a particular source must not undermine the lawyer’s professional judgment on behalf of clients. Reciprocal referral agreements should not be of indefinite duration and should be reviewed periodically to determine whether they comply with these Rules. This Rule does not restrict referrals or divisions of revenues or net income among lawyers within firms comprising multiple entities.
[5]Campaign contributions by lawyers to government officials or candidates for public office who are, or may be, in a position to influence the award of a legal engagement may threaten governmental integrity by subjecting the recipient to a conflict of interest. Correspondingly, when a lawyer makes a significant contribution to a public official or an election campaign for a candidate for public office and is later engaged by the official to perform legal services for the official’s agency, it may appear that the official has been improperly influenced in selecting the lawyer, whether or not this is so. This appearance of influence reflects poorly on the integrity of the legal profession and government as a whole. For these reasons, just as the Code prohibits a lawyer from compensating or giving anything of value to a person or organization to recommend or obtain employment by a client, the Code prohibits a lawyer from making or soliciting a political contribution to any candidate for government office, government official, political campaign committee or political party, if a disinterested person would conclude that the contribution is being made or solicited for the purpose of obtaining or being considered eligible to obtain a government legal engagement. This would be true even in the absence of an understanding between the lawyer and any government official or candidate that special consideration will be given in return for the political contribution or solicitation.
[6]In determining whether a disinterested person would conclude that a contribution to a candidate for government office, government official, political campaign committee or political party is or has been made for the purpose of obtaining or being considered eligible to obtain a government legal engagement, the factors to be considered include (a) whether legal work awarded to the contributor or solicitor, if any, was awarded pursuant to a process that was insulated from political influence, such as a “Request for Proposal” process, (b) the amount of the contribution or the contributions resulting from a solicitation, (c) whether the contributor or any law firm with which the lawyer is associated has sought or plans to seek government legal work from the official or candidate, (d) whether the contribution or solicitation was made because of an existing personal, family or non-client professional relationship with the government official or candidate, (e) whether prior to the contribution or solicitation in question, the contributor or solicitor had made comparable contributions or had engaged in comparable solicitations on behalf of governmental officials or candidates for public office for which the lawyer or any law firm with which the lawyer is associated did not perform or seek to perform legal work, (f) whether the contributor has made a contribution to the government official’s or candidate’s opponent(s) during the same campaign period and, if so, the amounts thereof, and (g) whether the contributor is eligible to vote in the jurisdiction of the governmental official or candidate, and if not, whether other factors indicate that the contribution or solicitation was nonetheless made to further a genuinely held political, social or economic belief or interest rather than to obtain a legal engagement.
Modified By:
N.Y. State Ethics Op. 930 (2013) (lawyer’s participation in exclusive arrangement with insurance agency in which agency would market summary plan description for price that would include lawyer’s review for discounted fee for clients referred by agency may violate Rule 7.2 if lawyer charges higher fee to other clients)
New York State Ethics Op. 885 (2011) (unethical for attorney who receives client referrals from nonlawyers to reduce customary fee and refund balance to client “with the understanding that the client would owe [that] amount to the non-attorney”).
N.Y. State Ethics Op. 897 (2011) (lawyer may use website company to advertise internet “daily deal” coupon, whereby company receives client’s coupon fee, retains portion, and forwards remainder to lawyer; retained sum is cost of advertising and not prohibited referral fee)
N.Y. City Ethics Op. 2014-1 (2014) (discussing factors for lawyer to consider before entering arrangement to review documents for nonlegal organization’s customers
N.Y. State Ethics Op. 1001 (2014) (law firm may sell advertising in its newsletter to other professionals if no improper fee-splitting or referral arrangements);
New York State Ethics Op. 799, 22 Law. Man. Prof. Conduct 498 (2006) (lawyer may not pay to be listed on website that analyzes inquirers’ legal problems and then forwards inquiries for follow-up to appropriate subscribing lawyer because fee constitutes impermissible payment for referrals);
Nassau County (N.Y.) Ethics Op. 01-4, 17 Law. Man. Prof. Conduct 123 (2001) (commercial venture’s website that allows consumers to select from list of participating attorneys is acceptable group advertising rather than unauthorized lawyer referral service);
New York City Ethics Op. 2000-1 (2000) (lawyer may respond to invitation to bid on legal projects through website on which potential clients who have paid fee to post their projects will contact responders; lawyer does not pay any fee to service provider)
New York State Ethics Op. 791, 22 Law. Man. Prof. Conduct 106 (2006); some ethics committees have forbidden lawyers’ participation in business networking groups that encourage, expect or require members to refer clients to one another
N.Y. State Ethics Op. 896 (2011) (law firm that performs lien searches for clients through wholly or partly owned business is subject to Rule 1.7(b) and must obtain client’s informed consent even if business run separately)
N.Y. State Ethics Op. 752 (2002) (prohibitions on acting as broker and lawyer in same transaction continue to apply)
N.Y. State Ethics Op. 930 (2013) (lawyer’s participation in exclusive arrangement with insurance agency in which agency would market summary plan description for price that would include lawyer’s review for discounted fee for clients referred by agency may violate Rule 7.2 if lawyer charges higher fee to other clients)
Cloud Computing
Opinion 1020 (9/12/2014) http://www.nysba.org/CustomTemplates/Content.aspx?id=52001
Reasonable Care Standard
Specific Recommendations
- Vendor must have an enforceable obligation to preserve confidentiality and security, and should notify lawyer if served with process for client data.
- Use available technology to guard against foreseeable attempts to infiltrate data.
- Investigate vendor security practices and periodically review to be sure they remain up-to-date.
- Investigate any potential security breaches or lapses by vendor to ensure client data was not compromised.
Technology Competency
Comment to Rule 1.1 [8]
To maintain the requisite knowledge and skill, a lawyer should (i) keep abreast of
changes in substantive and procedural law relevant to the lawyer’s practice, (ii) keep abreast of the benefits and risks associated with technology the lawyer uses to provide services to clients or to store or transmit confidential information, and (iii) engage in continuing study and education and comply with all applicable continuing legal education requirements under 22 N.Y.C.R.R. Part 1500.